Kings arena financing plans, Placer County role, grow clearer

New report outlines options to pay for $400 million sports, entertainment complex in Sacramento
By: Gus Thomson, Journal Staff Writer
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SACRAMENTO – The drive to keep the Sacramento Kings is also planning to keep its hand out of Placer County taxpayer pocketbooks. The 100-strong Think BIG committee of regional leaders unveiled a report Thursday on financing options that indicated future efforts would avoid any proposals to commit taxpayer-generated funds to construct and operate a new $400 million sports and entertainment complex in the Downtown Sacramento railyard site. The report states financing options don't include a broad-based city tax or a regional sales tax. The arena, which would be built with a combination of public and private dollars, is targeted to be completed by 2015 and would seat 18,594. Power Balance Pavilion, the Kings’ 23-year-old home, seats 17,317 but is considered outdated because of its lack of money-making luxury suites, mini suites, loge boxes and club seats. Sacramento Mayor Kevin Johnson stressed the regional nature of the effort to keep the Kings by building a new arena. But he also said that funding efforts would steer clear of any regional tax plan or broad-based city tax scheme. “Taxpayers come first,” Johnson said. State Sen. Ted Gaines, R-Roseville, serves with state Senate President Darrell Steinberg as co-chair of Think BIG. He spoke at Thursday’s event and praised the funding plans for not incorporating any sales tax revenues or looking at a tax increase to pay for a share of Kings arena costs. The senator added that the financial plan calls for the arena to be self-sustaining to insure that the public won’t have a money-losing building on its hands in the future. “We’ve got to look out for the taxpayers as we’re moving forward,” Gaines said. “We need to take a clear-eyed approach.” Gaines said the group will serve as a “watchdog” on a lease agreement with Kings owners and a potential operator on the city-owned arena to make sure it isn’t overly generous. If there are cost over-runs, any agreement should also specify that taxpayers are not responsible, he said. Kings owners the Maloof family threatened to move the NBA franchise to Anaheim last spring – but after a plea from Johnson and support from NBA commissioner David Stern – backed away. Sacramento was given another year’s reprieve to deal with a long-standing issue of replacing the King’s current home arena with a modern facility that would generate more revenue for its owners and the NBA. The new report provides a number of financial options that will be explored with the Kings over the next three months. Johnson said the goal is to have a definite financial plan in place by the end of the year. The report delivered the funding plan in three broad categories: private sector contributions from the Sacramento Kings and other private entities; user fees drawn from those who use the facility and benefit from its development; and contributions from the public, including sale of the Natomas land the Kings current arena sits on, hotel bed taxes and digital signage fees. Auburn City Councilwoman Bridget Powers, a member of Think BIG, said that the taxpayer contribution wouldn’t be politically realistic. But other ideas, such as formation of a hotel association to raise funds from businesses that would directly benefit from the arena, have potential, she said. A hotel association would establish a fund-raising entity not associated with government or taxpayers, she said. Other ideas – including placing cell towers at the site and putting up revenue-generating billboards – also have merit, she said. Powers said Placer County residents still play a key role in the future of the Kings in Sacramento. March is the NBA’s deadline to have a new arena plan in place. “Placer County residents can sign up for season tickets and we can show by next March that the arena can be filled,” Powers said. “I would definitely not want to see the Kings leave. They’re a great asset to the community.” Powers stopped short of predicting the effort to keep the Kings in Sacramento would succeed. “I’ll let you know in March,” Powers said. “It would not be for lack of effort. This huge group has shown we’re committed.” ------------------------------------------------- Small Ball Sacramento ranks as one of the smaller NBA markets. Here are the rankings, according to several statistical measures reported by Barrett Sports Group at Thursday’s Kings arena financing announcement. The NBA has 30 teams: - 21st in population - 15th in average household income - 19th in TV market population - 21st in radio population - 27th in the number of companies in its area with $50 million or more in sales - 8th in estimated five-year population growth